Spot silver was trading above $16/oz Friday morning, its highest since October, as recent base metal support pushed the precious metal 2% higher overnight, adding to its outperformance of gold so far in March.
The London Bullion Market Silver Price settled at $15.94/oz Friday, up 23 cents from Thursday's close. The London Bullion Market Gold Price settled at $1,254.50/oz Friday morning, down $12 on Thursday's close.
Both precious metals have gained 15-20% since the beginning of the year, gold dragging up silver on its early safe-haven demand and lower global interest rate expectations.
But silver, with over half its demand from industrial applications, has outpaced gold in March, up almost 7% compared with 2.5% since the beginning of the month, driven largely by a surge in base metal prices in recent weeks.
As a result, the gold-silver ratio is down from its all-time high of 84 at the beginning of the month, to 78 Thursday. That is, one ounce of gold buys you 78 ounces of silver.
Recent weeks has seen a recovery of almost all the base metals on the London Metal Exchange, as they profit from recent dollar weakness and signs of greater demand, three-month copper hitting a new five-month high of $5,130/mt in early LME trade Friday.
Zinc was priced at around $1,850/mt as of 1100 GMT, only marginally below its multi-month high of early March, and nickel climbed for a time to a four-month highs of $9,000/mt.
Dollar weakness has driven up prices of most commodities this week, after Wednesday's US Federal Open Market Committee statement signaled plans to raise interest rates twice this year, down from a December projection of four times, citing weakening global economic growth.
However, signs of greater industrial demand have also played a part, as seen in silver's outperformance.
Data released by China's National Bureau of Statistics overnight showed house prices rose more sharply in February than at any time in almost two years.
"This has given rise to expectations of robust demand for metals in general and copper in particular given that the property sector in China is the second-largest consumer of copper," Commerzbank noted in its daily commodities report Friday.
China's National Bureau of Statistics recently said February copper imports were 49% higher than a year earlier at 420,000 mt, indicating higher industrial demand.
